31 posts categorized "Metrics & Analytics"

In the golden age of sales, the best salesmen were those that could close a deal by reading body language. In our digital age, those salesmen are pretty much out of a job.

Why? Body language means something totally different when you’re looking at online activity. Folded arms and raised eyebrows don’t matter - clicks and cookies are what holds weight. Digital body language is now the name of the game. Learning how to read it is key to successful marketing and drawing in new clients.

Digital Body Language: A Crash Course

Simply, it’s just people’s online behavior on websites, emails, social media, and so on. How many times do they visit a site, what they click on when they are there, how many times they post to social media sights, when they are most likely to use the web ... these are all digital body language.

The trick is to read that language and use it to generate leads. It’s easier than it sounds. Existing software and some old fashioned research on your part is the key.

Let’s start simple.

People leave a cookie trail of their online actions, and you can use that to your advantage. Email marketing metrics and/or basic web tracking software can go a long way to measuring digital body language.

Here’s a great example by Steve Girshik of theinnovativemarketer.com. Check out this marketing activity log for a client, let’s call him John:

March 1 - Sent email - Opened at 8:32 a.m. Clicked through to a web page at 8:35. Visited 2 web pages

March 3 - Visited 10 web pages at 8:15 a.m.

March 14 - Sent email. Opened at 8:45 a.m. Clicked through to three web pages.

First and foremost, John is clearly interested in your company. He has visited several pages, several different times over the course of a month. That in itself is a solid lead.

But go a little deeper. You can tell that he's doing his web surfing and email reading before 9 a.m. That is likely a good time to reach him at his desk. While the log doesn’t go into detail, I would bet those follow-up calls that went to voicemail weren’t made in the morning. You might think the missed calls mean he is not interested ... his digital behavior tells a different story.

Does someone always download white papers or case studies that you post on your site? Have they recently started following your blog, liked you on Facebook or started following you on Twitter? Are they commenting on any of these sites and when are they most likely to do so? This is all “body language” showing a level of interest that can be a potential lead.

We’ve used this approach at FreshGigs.ca to better track and understand who are visitors are so that we can engage with them in a more relevant way and tailor our messaging to what they are looking for.

Digital Body Language for Personalized Marketing

By the time you or your sales team even know about an opportunity, that client has been all over your website. Most people are researching online and making up their mind about you before they even talk to a live person.

The days of one-size-fits all marketing is over.

According to Mickey Alon, CEO and Co-Creator of Insightera, a B2B online marketing tool for website personalization, more than 98% of online visitors are anonymous. However, websites tailored to read digital body language can capture their data. There are companies out there that offer tools to collect this data for you.

Companies can use that data to provide a personalized experience. You can target prospects based on their industry, location and actual behavior to provide them with relevant content while visiting the site.

You can also use digital body language to:

Create targeted webinars to a specific audiences at specific buying stages and so on, as well as tailor microsites to target the participants of that webinar

Target remarketing emails after a visitor has left your site that offer an opportunity to reconnect or offer a specific discount

“You are able see what prospects are interested in and then respond by sending them case studies and other information that speaks directly to their needs and areas of interest,” says Jill Konrath, leading sales strategist and author, in Digital Body Language by Eloqua. “That relevancy is so powerful in today’s business environment and the relevancy quotient just keeps increasing.”

The Takeaway

Using digital body language to build a relationship with potential clients is a little bit like the relationship you have with your favorite coffee place. You go in, the barista knows what you want and its ready in no time, and she will likely recommend a slice of coffee cake based on your previous visits.

The experience is all about your needs. That level of trust and familiarity keeps you coming back.
That’s the beauty of digital body language. You build interest, trust and familiarity by personalizing information to people based on their own likes and behavior.

The sky is really the limit with digital body language. Even if you can’t afford fancy software to track a potential clients’ every move, you can track the activity of email campaigns, data requests, social media pages and so on.

Since more and more of our world is moving online, you won’t regret getting to know your audience.

Michael Zipursky is an author, consultant and entrepreneur. He is the co-founder Business Consulting Buzz, a resource centre focused on helping consultants become more successful. His work has been featured in Maclean’s, Financial Times, FOX Business, Marketing Magazine and other media. Connect with Michael on Twitter @MichaelZipursky

Would you like to become a guest blogger on this blog as well? Get in touch!

PS. On November 14, we are hosting the 2nd edition of the International Email Marketing Summit @ Your Desk - this is a free online conference with presentations on email marketing trends, best practices and tips and tricks. To find out when we open registrations, sign up to the mailinglist.

A very simple test can allow you to figure out if the metric you are dutifully reporting (or absolutely in love with) is gold or mud.

It is called the Three Layers of So What test.

Ask every web metric you report the question "so what" three times.

Each question provides an answer that in turn raises another question (a "so what" again). If at the third "so what" you don't get a recommendation for an action you should take, you have the wrong metric. Kill it.

This brutal recommendation is to force you to confront this reality: If you can't take action, some action (any action!), based on your analysis, why are you reporting data?

The purpose of the "so what" test is to undo the clutter in your life and allow you to focus on only the metrics that will help you take action.

All other metrics, those that fall into the nice to know or the highly recommended or the I don't know why I am reporting this but it sounds important camp need to be sent to the farm to live our the rest of their lives!

Stephanie Miller wrote a great post over on the Mediapost Raw blog during this week's Email Insider Summit. Here are some clippings:

...Jim Sterne, the keynote speaker here at the Email Insider Summit today reminds us that strategies without metrics are only wishes. He quoted the oft heard quip, “Do not use stats as a drunkard uses a lamp post – for support rather than illumination.” ...

...Jim reminds us that the only three business metrics that count are increased revenue, lower expenses and increased customer satisfaction...

...The only way to improve response and revenue from email marketing is to create great subscriber experiences. It’s pretty simple - give your subscribers what they want (relevance, power, control, insight, fame) and they will give you what you want (revenue, response, engagement)...

...Email is a wonderful tool, and a great way to establish my reputation and build relationships. But it’s also the fastest way to destroy my reputation by looking like a spammer...

...The experiences we create must be important to the subscriber, not by what we as corporate messengers think is important. Everything we measure has to be about the customer not about the company...

Despite your hard work and what is in your opinion a well-planned and flawlessly executed email campaign, you may still find yourself with deadwood on your list. Recipients who have been inactive, meaning no opens and no clicks, for six months or more are dragging down your campaign’s performance.

There are a variety of reasons why recipients stop responding to your messages. Generally speaking, it boils down to the following factors:

They were never fully engaged as new subscribers.

Their interests have shifted, therefore your mailings are now irrelevant.

They signed up for your emails just to get some freebie, download a white paper, etc. They were never engaged, but never unsubscribed after they got what they initially wanted.

Your emails are getting routed to the junk/spam folder which recipients rarely check, if at all.

They’ve abandoned their free email account or rarely check it as they have designated it the “spam” account—the email address they provide when signing up for contests, promotions and the like.

No matter the reason for inactivity, consider these three tips to reactive your recipients and get them engaged again.

1. Define InactivesFirst, define inactivity and see how much of your list has gone dormant. You may consider subscribers with no opens or clicks for a particular length of time inactive. You may designate another portion of your list slightly inactive if they have scant activity for an extended period of time and haven’t purchased anything in the past year. Whatever the criteria, make sure you clearly define the parameters and segment these recipients based on their behavior into groups.

2. Try to Re-Engage Them with a ConversationOnce you have segmented your list based on activity level, create an email campaign that appeals to the different groups you identified. For instance, if you divided your list into three basic categories: active, slightly active and inactive, consider sending messages that include the following:

A survey asking them how your email program can better meet their needs and what kind of content, products, etc. would be of most interest to them. Then create new profiles for these preferences and personalize their emails accordingly going forward.

A “can’t refuse” offer, typically for your most active customers, or package up a “best of” series if you are a content provider.

A trigger- or lifecycle-based program for slightly active subscribers using click activity, purchase history or other behavior-based data.

A final email to your inactives letting them know that unless they opt-in again, they will no longer receive emails from you. Chances are if a subscriber hasn’t opened or clicked in 12-18 months or more and has ignored your “reactivation” attempts, then the relationship has probably run its course anyway and it’s time to let go.

Additionally, another reason to remove old addresses from your list is that ISPs are increasingly taking old, abandoned addresses and using them as “spam traps.” Send too many emails to these spam trap accounts and it’s likely your messages will get blocked.

3. Evaluate Your Email Program for Inactivity TriggersOnce you have completed your first reactivation campaign, examine your email program for practices that could trigger inactives. For example:

Don’t pursue irrelevant subscribers. Be careful when running acquisition campaigns built around incentives, contests, etc., that have little to do with your email program. Avoid participating in co-registration deals with incompatible partners.

Mind the frequency. Are you mailing too often or not enough? Both can lead subscribers to disengage without taking the extra step of unsubscribing. If possible, offer recipients a choice of how often they want to hear from you. Migrate away from the “batch and blast” approach towards more triggered, lifecycle and behavior-based messaging.

Manage their expectations. Are you delivering what you promised at opt-in? Modify both your opt-in page and email program as necessary to ensure that you are meeting or exceeding subscriber expectations.

Know the competition. Are your key competitors delivering a greater experience to mutual subscribers than you are? Take the opportunity to learn what your competition is doing well and not so well. Adjust your program accordingly and win them back.

Simplify your unsubscribe process. Is it super easy to unsubscribe from your program, or are you hiding the unsubscribe link? Some readers may either give up or distrust the link enough not to use it. Make your unsubscribe link clearly visible and modify your unsubscribe page to offer alternatives to unsubscribing, like allowing them to change their email address or their preferences for frequency, content, interests and format.

Re-engaging recipients takes an understanding of who they are and what they want. If they are potentially interested in your products or services, a few tweaks to your campaign and using what you know about them could yield great results for your program. By reinvigorating your list and eliminating those who are completely inactive, you’re likely to boost deliverability and improve your metrics.

Savvy marketers realize that you can only achieve solid improvement on campaign elements that you actually take the time to measure. The great thing about email marketing is its ability to be evaluated quickly and effectively. If you're not evaluating past campaign performance, you’re missing out on key insights that can improve results.

Email marketers should regularly evaluate some core metrics. These include:

Delivery rate

Open rate

Click-through rate

Unsubscribe rate

Conversion rate

Take an in-depth look at each metric and examine some ways you can improve your results.

Delivery RateAs both Internet service providers and recipients tighten spam filters, more email messages are failing to reach customers. It’s been estimated that as many as 20 percent of permission-based email messages are mistakenly blocked.

Delivery rates can be improved in a number of ways. Getting your recipients to add your address to their address book certainly helps, as does practicing diligent list hygiene and carefully monitoring spam complaints. Surprisingly, these simple approaches are not yet widely adopted. For instance, Silverpop’s “2005 Retail Email Marketing Study” found that only two out of 10 companies requested recipients add the company address to their email address book. There’s a lot of room to improve this key metric for most marketers.

Open RateThe marketing strategies that allow you to build a relationship with your customers affect not only open rates but also other metrics downstream. Research shows that the number-one factor that influences people to open an email today is knowing and trusting the sender. Presuming you have done everything to ensure a recipient wants your email--that is, you've obtained permission and are sending only relevant communications at an appropriate frequency--using your company or brand name in the "from" field and in the subject line will help increase the chance that your email will be opened and read.

Click-through RateThe interactive nature of email marketing is one of its chief allures. With email, interaction comes when a recipient clicks on a link. As with so many other elements leading to success in email marketing, the relevance of the messages you send recipients can dramatically improve clicks. The key is personalized content.

Always address recipients by name. Try sending different offers to recipients based upon geography or demography, and use behavior (i.e. purchase history, email click history, visits to your Web site) as an attribute to guide campaigns.

Also think about the look and location of your links. Prominently-displayed hyperlinks and big action-oriented buttons, accompanied with compelling reasons for the action, make it clear to recipients what you want them to do. Further create a sense of urgency by giving reasons why they should act soon, such as limited availability, subscription expiration or “offer-ends” dates.

Unsubscribe RateIf you see big jumps in the number of unsubscribes, your email program may be in trouble and it’s time to take a hard look at what you’re doing.

Separate new addresses from old and evaluate each list differently. If you’re seeing a growing number of new subscribers opting out of your email program, perhaps it’s because what you told them they’d receive when they registered doesn’t measure up to their expectations.

If you’re seeing customers who have been with you for some time begin to drop off, review past email messages and evaluate how fresh the promotions are and how compelling the merchandising is.

Unsubscribe rates can be lessened with appropriately constructed preference centers. Perhaps the frequency of emails is too high for some on your list. Offering weekly updates rather than daily bulletins, for example, could salvage an unsubscribe. Giving a choice of topics or product offerings can also help to maintain a relationship with customers and prospects.

Conversion RateUltimately, the goal of your email campaign is to entice recipients to take some desired action, whether it’s to purchase a product, to sign up for a newsletter or white paper, or to schedule an appointment. The conversion rate is another important metric that gives you a read on how relevant your email campaign is to your customers.

Getting recipients to do what you want is best accomplished when you make it clear what you expect them to do. Make the call to action obvious, and then make it easy for the recipient to comply.

Design landing pages with the thought in mind that it’s your last chance to entice a recipient to act. Further, make the conversion process easy by populating forms with the customer’s name, shipping address and other information at your disposal.

Pulling it All TogetherThere's a wealth of information available to marketers from most email reports. If you begin focusing on one metric a month, you’ll soon have an invigorated email program achieving dramatically improved results.

It's amazing how many people do not know how open rates are calculated. Loren McDonald rightfully is trying to convince the email marketing world to change the name from "open rate" to "render rate" because that is what it is. Read his articles and the comments on them here and here.

Open rates are tracked by the number of times a certain image was downloaded from the sending server. So if images are not being downloaded it will not be able to track whether or not you've opened the email.

Let me explain with two examples:

Let's say your email client downloads images by default and you use a preview pane to scroll through your inbox. In this case when you preview an email in the preview pane, even if it's only for half a second, this will be counted as an open.

If your email client blocks images by default and you open an email and read it without downloading the images, an open will not be tracked.

In the first case, an open is tracked even though you didn't read the email, in the second case you read the email but an open is not tracked because the images were not downloaded. Only when you view an email (it doesn't matter if you open it or view it in the preview pane) and download the images, an open will be tracked.

Keep this in mind when you evaluate your open rates. The only reason you should look at open rates over time is to determine a trend. Don't use the open rate as an indication of how many people actually opened and read the email, because you might be way off.

In this blog post, Kevin Hillstrom tells us to ask our business intelligence or data mining or SAS programming expert to profile our e-mail marketing list for us.

Keep your analysis simple. Take twelve month buyers, and split them into three groups ... those without an e-mail address, inactive e-mail subscribers, and active e-mail subscribers.

Pay attention to the trends:

Urban, Suburban, and Rural Customers. Customers have different preferences. The rural e-mail subscriber might respond to free shipping promotions. The urban e-mail subscriber might appear to never respond, because she visits stores after receiving an e-mail campaign.

Advertising Micro-Channels. Do e-mail subscribers and active e-mail customers purchase using e-mail in combination with catalog marketing, direct marketing, search marketing, or any other kind of marketing? If the answer is yes, your multichannel expert may be right in seeking to align all marketing activities across the company.

Future Channels. One of the unintended consequences of multichannel marketing occurs when one form of marketing (e-mail marketing) is effective, causing the customer to switch channels. Most of the Multichannel Forensics projects I work on suggest that customers are much more likely to switch channels than they are to become loyal multichannel shoppers. See if your e-mail marketing activities shift customer behavior. If e-mail marketing causes a shift to a lower-value channel, re-visit the purpose of e-mail marketing.

Creating successful and well-received email campaigns is every marketer's dream. Ensuring your campaign gets the best possible response should involve some measure of testing.

According to a 2005 JupiterResearch report, marketers who used testing were twice as likely to attain conversion rates of 3 percent or better. Despite studies showing that testing yields positive results for marketing campaigns, only about 40 percent of marketers do it, mainly because it’s perceived as difficult.

In this article, Silverpop offers a couple of easy tactics to get your testing efforts underway.

Step 1: What to TestTesting is completely dependant on what you’re trying to accomplish. Is your goal to improve open rates? Perhaps it’s to improve click-through rates. Whatever your goal is, your testing efforts should center on tactics that will help you in those areas. Factors marketers typically test include:

Subject lines

Long vs. short copy

Message layout

Offer

Frequency of mailings

Step 2: How to TestConducting your test doesn’t have to be a daunting task. Follow these tips to get good, representative results for your efforts.

Split your list. A popular option for splitting your list is the 10/10/80 split. Use 10 percent of your list to test one option and 10 percent to test the other. The remaining 80 percent receives the best-performing message. Dividing your list randomly can help with getting an accurate cross-section of your overall recipients.

Conduct tests at the same time. Sending your tests at the same time on the same day is important for controlling the response rate. Remember that time is a variable, and sending one test on a Monday afternoon and another on a Friday morning can yield very different results.

Make sure the results are statistically relevant. No matter how you decide what percentage to use, make sure you are testing a large enough sample to receive statistically relevant results.

Maintain a control group. Exclude a random sample of recipients from your tests so you can compare the results of your tests to a group untouched by your testing efforts. This is especially useful when testing recipient behavior over time.

“Concentrate on testing big changes—don’t test a blue versus green background color. Instead, focus on things like a four-column format versus a postcard format. Or, test an offer of 30-percent off versus $50 off a purchase,” he said. “Don’t focus on testing a single word change in the subject line, but rather test completely different subject lines for a more statistically relevant result.”

Step 3: How to Understand the ResultsThe goal of testing is not just to receive high response rates and drive conversions for a single mailing. Your goal is to learn as much as possible about your recipients and use that information in future mailings to improve relevancy for greater long-term success.

Testing can allow you to better understand individual preferences within your recipient database and directly improve relevancy. With testing, you’re able to determine which groups of customers prefer specific offers and, using that information, further your campaign goals.

In this article Loren McDonald tells us that a good email report shows where you've come from, what you've done
along the way, and clearly highlights where you want to go. A good
email report is like a map, showing you the specific turns, starts and
stops necessary to drive you toward success.

So what are the ingredients of a good email report?

1. Benchmarks. First, understand what your specific
benchmarks are, and, if applicable, how those compare to others in your
industry vertical. What benchmarks do you want to work from and try to
improve over time?

2. Response Models. How do customers typically
respond to your email messages? Do you get 90% of your conversions in
the first 48 hours, or is your product/service such that longer-term
consumer thought is needed? Defining your response curves and
understanding them as being fluid — ever-changing and in need of a
watchful eye — will make sure that when you pull data, you're getting a
clear and full picture of the true impact of your program(s).

3. KPIs. Define your key performance indicators, or KPIs. David Baker wrote an article
on this a year ago, and I'd suggest you read it for a good
representative sampling of typical KPIs. In general, these are the
metrics that are important to your specific business. If you are
looking to create brand awareness or engagement, your indicator might
be opens, clicks or referred friends. If you want to drive sales, then
you want to look at conversion rate, revenue and cost per conversion.
Whatever these metrics are, they should be actionable and mean
something — both to those who manage the programs, and the higher-ups
who need to buy into your efforts.

4. Putting it together. It is important to measure
performance campaign over campaign. If you don't have a historical
reference of your email campaign performance, please start immediately!
This can be as easy as creating an Excel spreadsheet where you can
track mailing over mailing. Keeping a record will allow you to see
overall performance trending and understand seasonality, list hygiene
issues and/or deliverability red flags.

Once you have your mailing-over-mailing scenario set up, you can
start to create pivot tables as a way to sort the data and look at more
specific bits of information. Over time you can look at data dimensions
like:

Segmentation. How do different customer segments do
over time? How does their performance change based on the messaging
they receive? How do different segments grow or shrink over time? What
is your most valuable segment?

Messaging. What messages resonate with particular segments? What are your "winning" offers, CTAs, general messages?

Creative. Which templates work best, what format?
How do particular users interact with emails - where do they click,
what behaviors are created?

During the last decade, lifetime value (LTV) has become the standard method for measuring the success of customer marketing programs. Return on investment is used for campaigns, and profitability is used, particularly in banks, to take a snap shot of the performance of existing customers.

Lifetime value, unlike these other measurements, predicts the future performance of a group of customers, based on their past and current spending behavior. It's the net present value (NPV) of the future profits to be received from a given number of newly acquired or existing customers during a given period of years.

In this article Arthur Middleton uses a great example of a retailer to explain the principles involved.

EmailStatCenter.com is conducting its First Annual EmailStatCenter.com State of Email Metrics Survey. The idea behind the survey is to gather some great insight to our industry on how we use metrics and what other issues we are battling in the fight for the perfect inbox.

Simms Jenkins invites all email marketing professionals to fill in this survey. And if you participate and opt in, you will receive the preview findings before they are released.

To determine how they measure up against industry averages and comparative metrics, marketers often ask themselves the following questions:

What is a good open rate for an e-mail campaign?

A good conversion rate?

A good bounce rate?

The frustrating answer: It depends. “Good” is relative. And “good” last year—or even last month—doesn’t guarantee a repeat.

Response rates depend on a litany of factors including value proposition, frequency, content, audience, age of list—the list goes on. Providing benchmarks without consideration for a campaign’s unique combination of these factors is similar to giving an arbitrary response to the question, “How tall should I be?”

And yet marketers still request benchmarks, something to compare their performance against. So, here are some tips to create useful and relevant benchmarks to drive accurate analysis of your campaigns:

1. Go beyond industry averages. ­Rely on published industry averages as general guidelines, not the end-all measure of your e-mail program’s success. When looking at industry stats, try to find those numbers calculated for your specific industry, list size and/or target audience to ensure that you are comparing apples to apples. And remember, industry averages are just that: average. Aim higher.

2. Establish custom benchmarks. Leverage your own e-mail campaign’s historical data to create tailored benchmarks for open, unique clickthrough and conversion rates. This can be done on a quarterly basis to account for the rapidly changing space. For a holistic view of your e-mail campaigns, include benchmarks for bounces, forwards, unsubscribes, spam complaint rates and even Web analytics. Because subscribers are the basis for your program, review monthly list growth as another indicator of success.

3. Create a report card. Use Excel, or a similar program, to create a simple report card. Using a line for each campaign, compare your response rates to both your customer and industry benchmarks. With a simple formula, you can create indexes to quickly identify the most and least successful e-mail campaigns. Create and review these report cards at least quarterly. It’s not enough to simply compile this data and save it on your hard drive somewhere: make sure you act on your findings.

4. Identify trends. With your report card in hand, it’s easy to identify trends in the data. Compare campaigns to identify the type(s) of e-mails consistently performing well or performing poorly. Identifying common elements within top and low performers can help drive testing, messaging and strategic decisions. Over time, you’ll be able to spot the best day and the best time to send your message, seasonal trends, and creative best practices for your audience.

5. Research outliers. Examine spikes and drops in response metrics from campaign to campaign to identify a cause. You may find a few anomalies; you also may find some key learning to apply to future campaigns. Either way, if you see a surprising number, test any theories on subsequent campaigns to confirm your findings rather than making a decision based on a potential one-time event.

So what are “good” metrics by which you can measure your e-mail campaign? The answer currently exists in your data. By creating internal benchmarks and monitoring them using a simple report card, savvy e-mail marketers can confidently answer this question in the context of their own e-mail program, and adeptly compare with industry averages. With this data in hand, it’s easy to share with co-workers, bosses, anyone asking!

Today I stumbled upon this question on the Web Analytics Forum. Someone from a Fortune 500 company wanted to know if there is a way that Google Analytics can help in getting information on their email campaigns.

Apparently it's possible as some people point out:

"If you use the URL Builder you could tag your links within the email, going out to your website as being from the medium of email, and the campaign could be the date and you could continue to segment if desired."

"You should just add a few parameters to your outbound links from the newsletter. Tag your links in the following fashion: http://www.yoursite.com/yourpage.html?utm_source=newsletter&utm_medium=email&utm_campaign=name_of_your_email_blast. Then, you can see in your Traffic Source Report the visits coming from links from your email blast and use it as a way to segment your traffic and compare various metrics such as goal conversion (if you have one setup), bounce rate, etc…"

Does anyone have experience with this? What are the pros and the cons? Share your thoughts and comments on the Email Marketer's Club forum!

A recent study by the Email Experience Council highlighted the lack of standardization around Email definitions and metrics and found that inconsistency in these areas makes it difficult for marketers to manage and improve upon their campaigns and/or e-newsletters. That's why the IAB created a document that aims to guide marketers and vendors towards more consistency in what the current email terminology actually describes.

The proposed terms below represent the metric as a "snapshot" of, or at a "moment in time" within, a particular campaign.

Basic Definitions

These words and phrased are used throughout the proposed terms below and, as such, it may be helpful to refer to them prior to or during further review.

Bounce: An Email that cannot be delivered to the mailbox provider and is sent back to the Email Service Provider that sent it. A bounce is classified as either "hard" or "soft." Hard bounces are the failed delivery of Email due to a permanent reason, such as a non-existent address. Soft bounces are the failed delivery of Email due to a temporary issue, such as a full inbox or an unavailable ISP server.

Email Service Provider (ESP): A business or organization that provides the Email campaign delivery technology. ESPs may also provide services for marketing, advertising and general communication purposes.

The total umber of emails delivered is the difference between number of emails sent and total number of bounces. So you may have sent out 10,000 emails, but 1,000 bounced so only 9,000 were actually delivered.

Lets say that there were 3,200 unique opens. Plug that into the equation and you get a 35 percent open rate.

Open rates, however, are misleading for 4 reasons:

Preview Panes

Blocked Images

Delivery Issues

Text Versions

Many email clients have a preview pane, and image blocking is a default setting. If the images remain blocked, even though a reader may be viewing the email, it will not count as an open because no image download took place to signal an open.

In terms of delivery, messages that are undeliverable, get filtered out as junk or caught in a SPAM queue do not generate a bounce message and are considered delivered. So in our example of 9,000 delivered, that number might only be 8,000. Now the open rate is 40 percent instead of 35.

Open rates may not include text versions either as there is no image associated with them. A text version is considered "open" when a link is clicked.

Though the above equation is the accepted definition of an open, not all marketers adhere to that definition. Some measure total opens instead of unique opens, leading to inflated open rates as a reader could open the email more than once. Others measure opens against total emails sent instead of emails delivered so bounces are counted.

In this article, Spencer Kollas explains how using reporting to catch problems early can improve email campaign effectiveness and safeguard your sending reputation.

Basically it all comes down to looking at the right things, identifying what is important, and knowing what to do with that information.

First, you need to identify the email communications that are most important for meeting your company's objectives. Then, examine what the desired response is for each email and track that metric. For example, the key metric for an email marketing campaign could be clickthroughs, sales or in-store traffic, depending on the call to action.

Don't get caught in the trap of only tracking opens and clicks, which won't always show you the whole picture. If you focus solely on the delivery of your newsletter and neglect tracking your welcome messages or other transactional mailings, you are losing out on huge learning opportunities.

Before delving into the various reports, you need to make sure that you understand what your systems can provide.

Reporting Orientation
When looking at reporting, there are a number of things to consider:

Establish the terms you'll be using and make sure that everyone understands and agrees with them. For example, are you calculating clickthrough rates based on delivered emails or opens? It's important to get internal consensus on a definition and then stick with it moving forward.

Track the same benchmark statistics each month in order to see trends and identify possible issues.

Create a simple way to show these reports to key stakeholders within your company. If you only discuss the numbers with your marketing team, you might be losing out on valuable information from others, such as your technical folks.

When you see issues arise, take action immediately. Don't wait to see if it was just that one message or something that happened that month. You can't risk waiting to see if it happens again.

Key Reports
So what should you be tracking? As mentioned above, you will want to adjust what you're tracking for each message type, but there are some overall reports that you should check on regular basis. These key reports include:

Messages sent

Messages delivered

Open rate

Click rate

Purchases

Unsubscribe rate

Complaint rate

This is the most basic information that you should be reviewing after each mailing, and definitely on a monthly basis for benchmarking purposes. In order to simplify the process, you should create a standard dashboard of all your key indicators to quickly review your performance.

By looking at these numbers, how they relate to various email message types, along with using some type of delivery monitoring tool, you will be able to get a decent understanding of what works for your customers.

Troubleshooting With Reports
There are a million different ways to slice and dice data to gain valuable insight into your mailing practices. This is how reports can be used to diagnose problems in several key areas:

Content Effectiveness: your reporting will tell you a lot about what content is working and what isn't. Depending on the reports you look at, you can help isolate problems with the subject line or embedded offers. If you have high open rates but low clickthrough, that would point to a lack of compelling content. However, if you have high deliverability, but low open rates, that might indicate a poor subject line, or perhaps a problem with frequency, which I'll discuss next.

Mailing Frequency: it's not always easy to find the right frequency that keeps customers engaged with your brand without annoying them with too many emails. One way to find out if you're over-mailing your customers is to look at trends in your open, unsubscribe and complaint rates. Review your data over a six-month period and look for a correlation between an increase in mailings, a decrease in opens and spikes in unsubscribe and complaint rates. If you segment your mail, compare the number of mailings against these three criteria. You should also establish a benchmark of typical open and unsubscribe rates, so you can notice any anomalies moving forward.

List Practices: reporting is one of the most important tools for identifying problems with your list practices. If you suddenly see a spike in delivery failure rates you should use reporting to isolate the main problem. If it's not due to an ISP spam block or other outside factors, you will want to investigate whether you have a problem with your data capture process, or if you've recently added a bunch of new contacts to your database.

So remember, review as many relevant reports as possible, agree on clear definitions for those reports and discuss the findings with all that are involved.

Ask a lot of questions about how your company or ESP is calculating e-mail metrics. If the method doesn’t work for you, change it. Not asking such questions can prevent you from making good choices for your email marketing program and result in lost revenue.

Talk to your ESP or ISP about bounce metrics. An EEC study found that only a third of mailers have good visibility into why their messages are bouncing, while another third have poor visibility—they only know what’s been mailed and the total number of bounces overall. This isn’t surprising because 25% of all ESPs don’t break out hard versus soft bounces. Make sure you know where your provider stands, and ask for better statistics if you’re not seeing the entire picture.

Assume discrepancies exist. One company may define hard bounces as messages that have been blocked as spam and another may count only those messages that have bad email addresses.

Become an advocate for change. The EEC has in the past called for a nonpartisan agreement on metrics. The more companies that call for this change the better.

The key distinction between direct online marketing and conversion marketing campaigns is the focus of each message. Direct marketing efforts center the focus on the product, while conversion marketing focuses primarily on the recipient. “Buy this item now”, versus “You will find what you are looking for here.”

Once we make that distinction, the way we measure the results clearly changes. For direct marketing campaigns, the first 48 hours are crucial in evaluating the success of a campaign based on its open and click rates.

For conversion marketing on the other hand, the time span we are monitoring increases. We become interested in things like customer satisfaction, repeat visits and total number of purchases. (Excess Voice 2007)

The majority of the results of direct marketing campaigns can be measured 24 - 48 hours after a launch. Measuring the success of a direct marketing effort boils down to the bare numbers. They are deliverability percentages, open rates, and click through rates. And perhaps most important of all, it is the cost of the effort versus your return of investment (ROI).

Even if only one person opens your campaign, clicks through to your site and spends $100 on a campaign that cost you $25, you have a successful direct marketing campaign; your ROI outweighs the cost.